AM to HF? Is this common/possible
Hi,
Currently first year UG and think I want to move into AM/HF as a career path. I am still unsure what to specialise in (FI, equities, etc) but am pretty sure I want to be on the buy side.
My dilemma is that HF sounds great, but how does what they do differ from an AM, and how do you get into a role at a HF? I have the understanding that HFs can be Long/Short, but can't some AMs also be L/S?
What skills are there that are needed for a HF that an AM may not have? Can you move from an AM to a HF?
This is hard for me as there are few HFs in the UK that offer internships/grad jobs for UGs.
Also probably worth noting I want to be a portfolio manager/CIO towards the end of my career, thats the end game.
Can any experienced monkeys help?
Thanks
Edit:
My dream really would be to be a bit like a prop trader where I am allocated x amount of cash and just told to make a return (old-school S&T where you could take risk); am I even looking at the right roles for this?
It's possible to switch but it depends on how relevant your experience is and also the brand name.
I was very lucky and joined a $1.5bn+ HF straight from undergrad in London from a non target, so it's doable but not common. The larger one's tend to hire more often and have dedicated schemes i.e P72, the full-time positions are almost all filled up from the summer internship programme though, so make sure to apply to those. Smaller and medium sized hfs typically post jobs to replace someone or if they're growing rapidly, most hire through e financialcareers and LinkedIn. They move quick though and typically want someone ASAP so don't expect to apply until closer to graduation. I applied in early July after exams and my first day was 10 days after the application.
On your question about long/short - very few AM short as regulation makes it's too restrictive for it to be lucrative, and if they do short it's almost always for hedging not speculation. If insistutional investors want a L/S fund they'll typically go to a HF.
The main difference is that HFs are unregulated, meaning they can invest in anything, anywhere, and follow whatever strategy they like, as long as it's consistent with the fund's prospectus. AMs invest in stocks, bonds, money markets, the rest is either prohibited or limited e.g. 10% max gold for non UCITS funds. Being unregulated means you can't market or sell to retail clients - the minimums are a lot higher too. Investors are typically large pensions funds, fund of funds etc. Performance is also more dependent on the HF and the PMs' abilities. There's less job security, decision's are faster, more of a collegiate culture, more exposure to senior PMs/CIO, larger % of pay is from bonuses (AMs almost all is from your salary), both will fund qualifications, training at AMs is more structured and teaches you the ropes while at a HF it's mostly learning on the job.